INSTITUTE OF ACCOUNTANCY ARUSHA

(IAA)

DEPARTMENT POSTGRADUATE STUDIES

TERM PAPER

NAME :

PROGRAMME : MBA

REG.NO : MBA/ 0

MODULE NAME : MARKETING MANAGEMENT

MODULE CODE : BAG 09101

FACILITATOR : Dr. Msafiri

CONSUMER BUYER BEHAVIOUR

INTRODUCTION..........................................................................................................1

CONSUMER BEHAVIOUR THEORY........................................................................1

Factors that influence consumer behaviour....................................................................1

The Different Types of Buyer Behaviour.......................................................................2

BUYERS CHARACTERISTICS AND CONSUMER BUYING BEHAVIOR............4

IMPORTANCE OF UNDERSTANDING BUYER BEHAVIOUR.............................5

HOW CONSUMER BUYING HABITS HAVE CHANGED......................................8

CONCLUSION..............................................................................................................9
INTRODUCTION

Consumer buyer behavior refers to patterns of behaviors that buyers display towards

consumption of certain goods and/ or services based on factors such as price

adjustments tastes and preferences, taxation, and seasonality. Basically, if the prices

of products are adjusted upwards, there will follow a decline in the purchasing rate by

the buyers. High taxation rates either on the goods themselves or on the buyers also

plummet the rate of buying a product. Other products are highly susceptible to the

tastes and preferences of the public, mostly if these goods have other rivaling brands.

Other goods such as umbrellas are gain high selling prospects during the rainy

seasons. People buy goods because goods are habitual, insatiable, and competitive

(Stone,2007).

CONSUMER BEHAVIOUR THEORY

Consumer behaviour theory is the study of how people make decisions when they

purchase, helping businesses and marketers capitalise on these behaviours by

predicting how and when a consumer will make a purchase. It helps to identify what

influences these decisions, as well as highlight strategies to proactively manipulate

behavior (chen, 2007)

Factors that influence consumer behaviour

Psychological

Psychological factors include a person’s attitude, perceptions about a situation, their

ability to understand information, what motivates them, their personality and beliefs.

For example, a person who is actively reducing their plastic consumption will buy

differently to someone who doesn’t believe in climate change.

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Personal

Personal characteristics include age, gender, financial situation, occupation,

background, culture and location.

An older person will probably shop in a different way to a younger person, for

example with a preference for bricks-and-mortar stores rather than online shopping.

Social

Social influences can include a person’s friends, family, community, work or school

community, or groups they associate with such as a local church or hobby group. It

can also include social class, living conditions and education.

A shopper who is at a school where a certain style of trainers is in fashion might

search out similar shoes to fit in with their peers.

The Different Types of Buyer Behaviour

It’s important to understand that everyone is different and makes different buying

decisions. However, these can generally be categorised into these four types:

1. Routine response

Brand recognition and repetition plays a large part in this type of buying behaviour.

People will purchase a brand they recognise, have tried before, or like the best. For

example, when choosing a loaf of sliced bread, you’ll probably have a favourite that

you reach for most often.

This type of buying doesn’t require much thought.

2. Limited decision-making

Often mid-level, occasional buying decisions fall into this category. They require

some research and little amount of thought before making a choice.

For example, you might be going out to the cinema and want to eat dinner beforehand

so look at the restaurants nearby. You pick one that’s within your budget, that offers

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the food you like, that’s within a short walking distance and that has a table for the

time you’d like.

3. Extensive decision-making

Buying decisions that involve a big financial investment or personal impact fall into

this category. Most buyers will spend an extensive amount of time researching before

making a decision.

Buying a house is one example. Many in the market for a new home will research

thoroughly, view numerous properties, weigh up different options, visit local areas,

check the nearby schools and facilities etc. before a purchase is made.

4. Impulse buying

An impulse buy has no prior planning. It is a purchase made on a whim and with little

thought. It’s often irrational and in the moment.

For example, if you’re waiting in a line to buy your lunch and see a magazine within

easy reach with an eye-catching front cover, then you might pick it up and buy it with

no in-depth consideration.

These ‘types’ will change depending on the situation and person. For example, a

consumer who has just started a low-fat diet might take longer choosing a food item

by checking the ingredients online and looking at reviews than someone who isn’t. An

affluent person might impulse-buy a car, whereas another might spend an extensive

amount of time researching different options and going for test drives.

And many will spend months researching where they want to spend their two-week

holiday, whereas others decide on a whim where to go and book a holiday at the last

minute. And some situations will force a consumer who is usually an extensive

decision maker into making an impulse buy – for example if their laptop breaks down

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and they need to buy another quickly without doing their usual due diligence because

they can’t operate without one.

This is why buyer behaviour is described as being both predictable and irrational.

BUYERS CHARACTERISTICS AND CONSUMER BUYING BEHAVIOR

A buyer’s judgment can hugely influence consumer behavior. A positive judgment

from a buyer who has already purchased and used a product is likely to auger

positively with the demand of the product. On the other hand, negative perceptions

about a product will affect negatively even the rest of the potential buyers. This factor

springs from the principle of the interconnectivity of social networks.

Bargaining

A trend of bargaining is often found in the behaviour of buyers. They prefer buying

goods by reducing the price as told by the seller. Buyers too do not frame uniform

price policy. The trend of bargaining is still in vogue in the markets.

Quality vs. Price – Buyers focus on price instead of the variety of the goods. They

therefore, prefer high price goods. A little bit change has come now because the

consumers have now begun purchase of quality goods on higher price.

Brand or Trademark Consciousness – It is the characteristic of the behaviour of buyer

that he appears now aware of the brand of items and considers these goods authentic

and of higher quality.

Changing Consumption Patterns

Owing to widespread education, increase in income and standard of living as also

desire of more comforts, the pattern of consumption is now being changed. The low

income group and high income group are increasingly buying fridge, tape recorder,

cooler, sewing machines etc.

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Role of Women

The role of women is increasing day to day in the manner of decisions for purchase.

The women do purchase of all kinds particularly in families where the husbands earn

the bread.

Credit and Guarantee

New motives for purchase are getting their way rapidly because of having credit and

guarantee facility available in the market. Such facilities are developing the trade and

commerce.

Complaining

Buyers are gradually being aware of their rights. They have started exhibiting their

complaints through media and the representations before the concerned authorities

and the forums. They can lodge their complaint before consumer forum and thus, can

receive the compensation against the damage/loss so sustained.

IMPORTANCE OF UNDERSTANDING BUYER BEHAVIOUR

Understanding consumers’ buying behavior is one of the elements that helps in

achieving marketing goals, without this understanding it makes gaining more

customers difficult. Especially in today’s competitive world. It also helps when

customers will buy more from business. Their buying behavior is one of the elements

which must be understood for a better view about the customer profile. Customers

base their buying decisions on both rational and emotional reasons.

They will look at a category on a rational basis, e.g. wanting an accountants’ tax

service, they then decide, especially for repeat customers on the brand. Getting

customers to have an emotional attachment to a particular brand is one of the keys to

keeping them loyal. As well it is one of the key factors in gaining referrals and

recommendations. When businessman is looking for making a marketing strategy it

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makes it easier to select the best strategy when these all important aspects about the

buying behavior are changed.

The following points speak out the importance of understanding buyer

behaviour:

Customer Needs Satisfaction

Organization should offer a marketing mix that satisfy the marketing needs. Every

customer is looking for a satisfaction from a particular product or service which he is

buying in exchange of certain amount of money. So buyer is always expecting

something more from the supplier and hence supplier must opt for balance between

ideal sale and practical aspect because ultimately every extra service provided over

and above the normal practice is resulting in increase in cost of product.

Hence these factor of customer satisfaction must be cleverly handled in such a way

that equally satisfies both the parties of transaction, i.e. buyer and seller.

Marketing Mix Development

Customers’ response to marketing mix keeps changing. Better understanding of the

factor that influence consumer helps organization development appropriate marketing

mixes.Audio CD market was very huge before a decade, but now, it have almost

vanished like a thin air. Now many web sites have facility of listening latest songs as

well as all types, genres of songs on line free of cost, so no single buyer will buy

expensive audio CD’s except for some exceptions.

But general trend is important which is now rapidly declining audio CDs and moving

to a new world of online music experience. Even latest TV shows and Movies are

widely watched over the internet either on you tube or some other live streaming web

sites. Hence before developing marketing mix thorough study must be made regarding

latest updates in market.

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New Market Opportunities

Unsatisfied needs motivate customer to buy. By understanding buyer behavior,

marketing can locate new market opportunities. Now, anyone having an internet

connection can purchase any product from rupees 5 to rupees 5 lack in less than 5

minutes. So failure of local dealer in providing required service often motivate

customer to look for different avenues which are very easily available.

Customer now analyze specifications, quality, and cost of product before purchasing a

product. If he is unsatisfied with one seller then thousands of other seller selling same

product are ready at his doorstep to fulfill his buying needs.

Target Market Selection

Behavior is an importance variable for market segmentation. By understanding buyer

behavior organization can effectively segment the market.

Efficient Resource Use

By understanding buyer behavior organization can make efficient use of marketing

resource. They can focus their marketing efforts in meaningful way so as to perform

various marketing duties from overall management process with greater efficiency. If

seller exactly knows the customer requirements his resources will be saved in greater

extent than without knowing customer behavior and his tendency of purchasing.

Resource allocation and saving is a different topic of study but is relevant in this area

where buyer behavior decides most of the sale. With the understanding of his buying

pattern, resources can be effectively utilized.

It will be a self-destructive initiative for a business organization to neglect buyer

behavior in deciding marketing mix for its product. Importance of buying behavior is

thus beyond negligence.

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HOW CONSUMER BUYING HABITS HAVE CHANGED

Consumer buying habits are continually evolving, and the ways that businesses think

about them have changed too. Initially, it was believed that consumers were rational

and behaved in consistent ways. However, as time progressed and more sophisticated

studies were conducted, it became apparent that consumers often behave irrationally

with numerous factors determining decisions and buying habits.

Consumers were then segmented, and user experiences were analysed to understand

how they shaped buying habits. The post-purchase activity and habits were also

studied so a customer journey could be mapped out from first decision, through to

consideration, purchase and post-purchase satisfaction.

It’s important to look at trends, for example eating habits have changed dramatically

from ‘meat and two veg’ to an appetite for cuisines from around the world. More

people are becoming vegan, and there’s been an increase in demand for plant-based

foods.

Payment methods and buying preferences have also evolved. Most people are happy

to buy online, however this was risky back in 1995 when the internet was new and

Amazon first launched.

Consumers are now purchasing SaaS services and subscription boxes, streaming

movies rather than going to a shop to rent a DVD. And buying their groceries online

without ever having to step foot inside a grocery store.

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CONCLUSION

In competitive environment one cannot thrust a product on consumer. He has to

produce what is demanded or what can be demanded. The marketing personnel study

consumer behaviour to find out what can be sold and what goods or services are likely

to be rejected. Through the study he is motivated to buy or not to buy particular

product. After study of consumer behaviour through market research or otherwise

manufacturer tries to find out how sales can be pushed of existing products, what

changes are required in existing products, what changes are required to get larger

market share. Before launching a new product survey of consumer behaviour is

necessary to find-out whether a particular product will sell or not so that accordingly

investment decision is taken (Brennan, 2001). The more important function and

purpose is to influence the behaviour of consumers through advertisements, incentives

and other methods so that consumer behaviour is studied by marketing personnel to

influence the behaviour of consumers after studying what factors decides the

behaviour for a particular product, persons, groups or regions. Consumer behaviour

theory allows businesses to understand more about their target audience and so be

able to craft products, services and company culture to influence buying

habits(Brennan, 2001).It allows a business to understand What consumers think about

your brand versus your competitors, How they choose between different alternatives.

Their preferred methods of paying. What products or services they are searching for

to fill a need, Ultimately, by paying attention to your customers’ buying patterns you

can launch products and services that they’ll have a higher inclination to buy. Or

make changes to store environments or online shopping processes to make it seamless

– therefore increasing your revenues.The study of consumer behaviour basically is to

mold consumer behaviour and his decisions by market man and to avoid failure of

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their product, promote new products and for sales promotion. The science at times is

misused and to protect consumers there are a number of enactments both in Tanzania

and other countries. Actually consumer movement in Tanzania is much weaker than

other developed countries because till a decade back was Tanzania sellers market and

competition is of recent origin.

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REFERENCES

Brennan, L., 2001. How prospective students choose universities: A buyer behaviour

perspective (Doctoral dissertation).

Chen, Y.H. and Barnes, S., 2007. Initial trust and online buyer behaviour. Industrial

management & data systems.

File, K.M. and Prince, R.A., 1992. Positive word‐of‐mouth: customer satisfaction and

buyer behaviour. International Journal of Bank Marketing.

Sproule, S. and Archer, N., 2000. A buyer behaviour framework for the development

and design of software agents in e‐commerce. Internet research.

Stanton, W.(1998). The fundamentals of marketing. New York: McGraw Hill.

Stone, MA. and Desmond, J. (2007). Marketing fundamentals. London: Routledge.

Taylor, L. J. (1991). Dimensions of fundamentals of marketing. New York: McGraw

Hill.